Wage Law

Heller Ehrman's bankruptcy filing might not leave its employees unpaid for wages or wage-related claims. Although Heller's bank had a security interest, and its landlord obtained a right to attach order and writ of attachment against the firm, it is being reported that Bank of America and Citibank may have blown a security interest that could result in more than $51 million of Heller Ehrman's loan payments being declared avoidable preferences in bankruptcy court. If the court requires the banks to pay back money on old debts they collected from the firm during the 90 days immediately prior to its December 28, 2008 bankruptcy filing, there could be a substantial pot of cash avaialble to pay the employees who are pursuing a WARN Act class action or any other type of wage claims against the firm. Any valid claims for straight wages due for labor performed would be priority claims, which would require that the employees be made whole on such claims before unsecured creditors get paid anything.